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Islamic Estate Planning: Protect your Family and Leave a Legacy – FBNQuest

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FBNquest - Investors King

Islamic Estate Planning involves the distribution of your assets that serve to preserve, manage, and distribute them after death according to the principles of the Shari’ah. According to the Islamic ordinance, those principles are significant in planning for dependents and represent an investment in the afterlife.

Islamic inheritance laws organise your wealth ownership and assets to ensure fairness and justice after your passing. Instead of leaving the tough decisions to grieving family members, you can arrange the gifting of your assets in advance. This creates a streamlined process for the distribution of the inheritance to all family members.

Islamic estate planning is essential in the life of Muslim faithfuls. Indeed, if you pass away as a Muslim without a proper plan for your assets, you may be breaching the bequest guidance stated in the Holy Book, which serves as an instruction manual for a Muslim’s life. However, many are not concerned with making an inheritance plan, even though a failure to make one could trigger intense family debate and hinder the transfer of some assets to specific beneficiaries.

According to the guiding principles of Islamic estate planning, after covering the funeral expenses and debts owed by the deceased, a person may designate up to one-third of their wealth. This discretionary giving is known as the Wasiyyah. However, there are limitations to this discretionary giving. For example, Wasiyyah cannot be given to someone already receiving a share under the Islamic inheritance laws. The Wasiyyah is most commonly given to charity or to care for distant relatives who cannot provide for themselves.

The residual two-thirds is the Mirath and is reserved for the Islamic heirs as ordained in the Holy Book. Primary beneficiaries are those who will inherit some of your wealth, provided that they are alive and Muslim. These are your spouse, children, and parents, and they receive a fixed share of the wealth. Secondary beneficiaries are those whose share of the inheritance is contingent on whether other primary beneficiaries are still alive. These may include siblings, grandparents, grandchildren, aunts, uncles, and other relatives. It is vital to appreciate the rights and obligations relating to an estate.

In preparing to bequeath an inheritance, it is crucial to organise your wealth in a manner that will make assets acceptable for consideration in an Islamic estate plan. In this regard, investments should be screened for compliance with Islamic estate ethics, and investments in interest-bearing assets are disqualified. Instead, it would help if you endeavoured to invest in increasingly popular Sukuk bonds. You should consider Mudarabah Investment accounts as substitutes to fixed deposit accounts and subscribe to a family takaful policy instead of a life insurance policy in your saving plans. As for pension assets, you should opt for a multi-fund structure with an option to invest in Shari’ah-compliant instruments.

Zakat, the third pillar of Islam, is a compulsory giving required from every financially stable Muslim. Those who have acquired wealth are obligated to respond to people in need and give back to the community. This response could include sponsoring widows or the education students and organising in a charitable Trust as part of an Islamic estate plan. Therefore, you must consult a professional estate planner to assist with setting up a Trust arrangement where 2.5% of your assets/wealth is set aside annually for Zakat.

Several other tools can be used to organise the transfer of assets to a specific beneficiary. They include Hiba (making gifts), Waqf (setting up an endowment or trust), Wasiyya (transfers by donation), and it is appointing a Wasi or guardian for living dependents. Getting it right requires a thorough understanding of the principles of Islamic estate planning and the various assets available to achieve compliance. FBNQuest Trustees can guide you through creating an Islamic estate plan that makes life easier for your beneficiaries.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Finance

Modulus CEO: G7 Statement of Principles is Acknowledgement of CBDC Future

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Central Bank Digital Currency (CBDC)

Recently, G7 officials broadcast a joint statement noting that CBDCs would complement cash and that any such payment system should follow a series of principles they laid out. The statement, they indicated, was a place for sovereign nations to begin as they developed policy and designed the technological pieces necessary for a digital currency launch. Perhaps most notably, the statement indicated that CBDCs must “do no harm to the ability of central banks to fulfill their mandates for monetary and financial stability.”

“I’ve been saying, for years, that regulatory bodies needed to wrap their arms around the concept of digital assets. In order to regulate something, you need to first understand it, both theoretically and practically. Once the regulators understand it, they need to put together common sense guidance that protects the citizenry from bad actors while allowing innovators to do what they do best: innovate,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“In essence, those same principles exist when deciding what a CBDC should look like. There needs to be a certain standard of privacy for users. In the United States, Senator Lummis has noted this on multiple occasions. CBDCs shouldn’t be an authoritarian power grab to allow the government access to every penny spent by its citizenry,” Gardner said.

“In addition, before a central bank can even begin to think about releasing a CBDC to the public, they need to have their technological infrastructure buttoned up. Before the beta test even begins, the cybersecurity aspects surrounding the program must be on point. Of course, the beta testing will allow you to fix any vulnerabilities with the proposed technology, but we must build out a CBDC program beginning with security at its core, rather than as an afterthought. Any logical human would conclude the same thing. There’s nothing surprising here,” said Gardner.

“Notably, they also considered how CBDCs would be energy efficient, and I think that’s an area where the industry needs to spend some time, perhaps even in partnership with some of the great minds in sustainability. If you look at how the private sector has come to view sustainability over the past decade, I think there’s already a roadmap in place. The idea is to look at ways to make the business case to be sustainable. Once we flipped the script and looked at it through that lens, there was a great deal of ingenuity that truly transformed business models. There’s no reason that we can’t build the business case for CBDCs with that sustainable vision in mind,” noted Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“You’re going to want the regulators in on this, you’re going to want innovators who understand the technology… but the citizenry is also going to want the transparency advocates to have a seat at the table. There needs to be a clear understanding of what privacy expectations users can have and how information will be used. Perhaps even more importantly, how will it be secured? And, what are the steps if there is a data leak? Those are all important questions to ask as central banks develop their programs,” noted Gardner.

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African Development Bank Group and MTN Nigeria Sign $500,000 Grant Agreement to Study Women’s Access to Financial

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Women Access

The African Development Bank has signed a grant agreement for $500,000 with Y’ello Digital Financial Services (YDFS), a fintech subsidiary of MTN Nigeria, to be used for a study into economic, religious, and social factors hampering access to finance for women in northern Nigeria.

The research, which includes a feasibility study, women-focused design and testing, will focus on both agents and customers to provide insights into women’s use of mobile money services, will be funded through the Africa Digital Financial Inclusion Facility (ADFI).

Despite being the continent’s largest economy, 55% of rural Nigerians still lack access to financial services [1]. The rate of mobile money adoption currently stands at 4% [2],  with an agent ratio of 228.8 agents per 1,000 adults [3]. Political instability and conservative cultural norms in parts of Northern Nigeria are thought to present barriers to women’s access to finance. Additionally, 80% of agents in the region are men.

“The African Development Bank, through the Africa Digital Financial Inclusion Facility (ADFI), is delighted to support this project, furthering our work to improve the quality of life for people in Nigeria and contribute to the Sustainable Development Goals, particularly as relates to poverty, and gender inclusion,” said Stefan Nalletamby, African Development Bank Director of Financial Sector Development.

On behalf of YDFS, Usoro Usoro, Chief Executive Officer, said, “We are truly excited about this partnership with the African Development Bank, and the possibilities for advancing financial inclusion in Nigeria, particularly for the traditionally excluded segment of women in Northern Nigeria.”

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African Development Bank Group President Akinwumi Adesina Assures Nigeria of Bank’s Strong Support to Achieve Food Security

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The President of the African Development Bank Group, Dr. Akinwumi Adesina, received a high-level Nigerian delegation led by the country’s Minister of Agriculture and Rural Development, Dr. Mohammad Mahmood Abubakar on Monday.

The meeting follows on the heels of an address by Dr. Adesina last week at a mid-term ministerial retreat presided over by President Muhammadu Buhari.

Dr. Adesina and the Nigerian minister discussed means of tackling growing concerns about the country’s food security.

Adesina said the Bank’s strategic support for Nigeria’s food production would be hinged on five factors: support, scale, systemic, speed, and sustainability.

He added, “I want to assure President Buhari that the African Development Bank will provide his government with very strong support to tackle the country’s food security challenges.”

“Inflation in Nigeria is high, at 16% or more. Of course, the biggest share of the consumer price index is the price of food, at almost 65%. So, if we can drive down the price of food, of course, we can drive down inflation.“

Adesina urged the Nigerian minister to concentrate on building the correct team and tactics to optimize the country’s farming seasons. He said that dramatically increased food output will result in lower food prices, which will in turn lower inflation rates.

Abubakar said his consultative mission to Abidjan was at the instruction of President Buhari.

“Our mission is to examine ways Nigeria could enhance food production, lower food prices, and create wealth,” the minister said.

Abubakar welcomed the Bank’s proposed strategy and described it as a landmark one that would spur Nigeria’s food supply production. “It will reverse the ugly trend of a sharp increase in prices of food in the country. I am pleased with the Bank’s strategy to facilitate the production of 9 million metric tons of food in Nigeria and to support us in raising self-sufficiency. The Bank’s Special Agro-Processing Zones initiative is a laudable one and Nigeria is grateful.”

Citing successes in Sudan, Adesina explained how the African Development Bank had supported the country with 65,000 metric tonnes of heat-tolerant wheat varieties, cultivated on 317,000 hectares.

“It took two seasons to do this,” he said. “Change will not happen in years. You will see changes in seasons. Sudan now produces 1.1 million metric tons of wheat. The same thing happened in Ethiopia in just two seasons with the production of 184, 000 hectares of wheat,“ he added.

In response to Bank successes in Sudan and Ethiopia, Abubakar said: “This gives me an additional measure of confidence. If you can do it in Sudan, you can equally do it in Nigeria. Not just in wheat, but also rice, maize, and soybeans.”

The African Development Bank will provide Nigeria with support through input delivery, including highly improved seeds and fertilizers to farmers, and an integrated input delivery platform.

Extensively discussed at the meeting was the Bank’s Special Agro-Industrial Processing Zone initiative as an effective medium-term plan for revolutionizing Nigeria’s agriculture value chain.

Adesina said: “The task, responsibility, and challenge of feeding Nigeria rests on your shoulders. You will receive maximum support from me, and the African Development Bank for the responsibility that President Buhari has given you. You will not be alone.”

He added: “The Bank stands ready to fully support and help Nigeria in the next farming seasons. So, we must make sure things turn around. The president must succeed, and Nigeria must succeed. Agriculture must succeed.”

Abubakar thanked the African Development Bank for its support and said the meeting gave him reassurances of what Nigeria can achieve with the Bank’s support in the farming seasons ahead.

The minister also called for the Bank’s support to recapitalize the country’s Bank of Agriculture. Both parties set up a task force team to develop a plan for accelerated implementation within the next 60 days.

Also at the meeting were a member of Nigeria’s National Assembly, Hon. Munir Baba Dan Agundi, Chair of the House Committee on Agricultural Colleges and Institutions;  the African Development Bank’s executive director for Nigeria,  Sao Tome and Principe, Dr. Oyebode Oyetunde; Vice President of Agriculture, Human and Social Development, Beth Dunford; Senior Special Advisor to the President of the Bank on Industrialization, Professor Oyebanji Oyelaran; Director General of the Bank’s Nigeria Country Office in Abuja, Lamin Barrow; the Bank’s Director of Agriculture and Agro-Industries, Martin Fregene; the Director for Agricultural Finance and Rural Development, Atsuko Toda; and senior officials from Nigeria’s Federal Ministry of Agriculture.

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